One of the driving reasons to own a business is to make money. Entrepreneurship offers a unique opportunity to grow wealth – both for yourself and for those who work for you.
The magic of business is the ability to generate abundance and to grow wealth. This is very different from living on a salary where one has to make the most of the fixed amount that you earn.
To become a master of making money we need to attend to three things. Let’s borrow the Mindset, Motivation, Method model from Jim Kwik’s book Limitless to explore what these are.
You will have noticed that some people seem to attract money, to manifest it, whilst applying the same effort seem to push it away. The root of this sits in our mindset.
Our money mindset is fundamental to our ability to attract and retain it. The more positive our feelings towards money, wealth and success, the greater the chance that we will attract it. Hidden clues to our money mindset are found in the way we talk about it, often cemented in childhood by the conversations around us.
Language such as “money is the root of all evil’ or “filthy rich, stinking rich” are indications of a deep negative attitude to money. We might also be afraid if we become rich of losing friends or becoming targets for crime or being considered an outsider. These feelings can work against us causing us to subconsciously push away financial success.
Understanding and mastering your emotions towards money will help you identify these negative patterns and break through to a more healthy relationship with wealth.
Resources: The Psychology of Money by Morgan Housel, How to make a hell of a profit and still get to heaven by John Demartini, Mindset by Carol Dweck
Step Two is Motivation. Without motivation we cannot succeed in the long term. the strength of your money motivation is closely tied to your personal and business vision and your desire to succeed and generate wealth for yourself and others. A crystal clear vision for success will catapult your ability to attract and successfully manage your money.
A clear motivation will also improve your ability to attract loan, grant or equity capital. As your business grows the need for additional working capital will also grow. This motivation will be strongest when you can back up your requests with financial records, company results and a healthy business reputation.
Investors and lenders (even if they are family, fools or friends ) want to know they can trust you and feel reassured that your business is a good investment risk. They will want to see a record of your business performance. To show this you need an accurate record of your income and that clearly separates personal expenses from your business.
You will need to persuade them that you can achieve the results you promise – this will be from past performance, or if you haven’t yet got any results, a good persuasive argument using research or case studies to illustrate the potential of your idea. Reputation is also critical – both business and personal – so evidence of your good character in the form of references from others. Having a clean record is important here!
Resources: Jim Kwik’s book Limitless, The Motivation Manifesto by Brendon Burchard
The methods you use to manage money are critical. For this reason the first person I recruit in any business is a book- keeper to set up and manage the financial record-keeping and to free me up to do more productive things such as make the sales.
Accounting provides you with regular and accurate information on where, what and how much money you have and is as important to a business owner as a stethoscope is to a doctor. Financial records are the lifeblood of your future too, and many entrepreneurs have failed to access growth finance because they forgot to prioritise financial record-keeping and lost years of trading history because there was no evidence.
For those entrepreneurs that prefer to do the record-keeping themselves there are also many great and free accounting tools out there such as Easybooks, free accounting software and be sure to tap into online e-commerce tools such as e-commerce tools such as iKhokha, PayFast, Yoco, SnapScan and Zapper which make life so much easier. Remember though financial management requires commitment
Resource: Atomic Habits by James Clear
Making money is only possible when you charge more for your products and services than they cost to make. This might seem obvious, but many businesses have misread how much their products truly cost until the end of the year when the accounts come in, or at the end of the month when there is not enough in the kitty to pay for overheads.
Costing must include the raw materials and direct costs that go into producing your product / service (things like beads, wire, flour, welding rods, labour) and overheads as the cost of a bookkeeper, bank charges, telephone, electricity, interest and tax.
Making money is one of the joys of business ownership. This becomes possible when we cultivate the right mindset, build a strong motivation for success and commit to the methods for managing the money we make.
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About the Author
Catherine Wijnberg is the CEO of Fetola and a serial entrepreneur.